Cardoza v. United of Omaha Life Insurance

Petitioner Jose Cardoza brought this lawsuit pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), to challenge United of Omaha Life Insurance Company’s calculation of his long-term disability benefits (LTD benefits). United of Omaha answered, asserting its calculation was appropriate, and counterclaimed, demanding that Petitioner reimburse it for payments of short-term disability benefits (STD benefits) which it claimed were miscalculated. On cross-motions, the district court granted Petitioner’s motion for summary judgment and denied United of Omaha’s motion, concluding United of Omaha’s decision to calculate Petitioner’s LTD benefits and recalculate his STD benefits as it did was arbitrary and capricious. United of Omaha appealed. Upon review, the Tenth Circuit concluded that the district court erred in granting Petitioner’s motion for summary judgment with respect to United of Omaha’s LTD benefits calculation: “[t]he plain language of the long-term disability benefits policy instructed United of Omaha to base its calculation of Cardoza’s LTD benefits on his earnings as verified by the premium it received. Thus, United of Omaha’s decision to do so was reasonable and made in good faith.” The district court did not err, however, in granting Petitioner’s motion for summary judgment with respect to United of Omaha’s recalculation of his STD benefits and demand for reimbursement “United of Omaha’s decision to recalculate Cardoza’s STD benefits based on his earnings verified by premium rather than his actual earnings was not reasonable.” The Court therefore reversed in part, affirmed in part, and remanded the case to the district court for further proceedings.